5 Operations Management Flashcards
Explain
Triple bottom line
Businesses need to take into account
• Economic
• Social
• Ecological factors,
to be sustainable
What is meant by Continuum of goods and services?
Only few businesses are goods or services only, most are a combination of both, some with high service, some with high physical content.
Products for instance often come with after – sales service (warranty repairs). A hairdresser (service) may apply some hairspray (product)
Provide one example for
• Economic
• Social
• Ecological
Sustainability
- Economic: - Avoiding waste
- Social - Provide safe work conditions
- Ecological - Avoiding pollution
Define
Cell production
What are the main advantages? (Also called cellular manufacturing)
a form of mass production in which the flow is broken up by teams of workers who are responsible for certain parts of the line
- Higher motivation
- Required cooperation of cells lead to better quality and less waste, hence lower cost
What is the difference between
Mass production and Batch production?
Mass production refers to economy of scale productions, where always the same product will be produced. (e.g. fast moving consumer goods such as Coca-Cola)
“Batch” refers to production of a group of identical products, which – after one batch is produced – is customized, but still produced with the same recalibrated machinery. (e.g. cars that come with a big variety of options.)
What are advantages and disadvantages of
customized job production
Advantages
- Mark-up (gross-profit-margin) is likely high
- Client gets exactly what they want
- Motivates skilled workers, no boredom, flexible
Disadvantages
- Expensive production method T
- ime consuming, also with the client
- Labor intensive and reliant on skilled workers
What should a company consider before they
Change production method
Changing production method has implications not only for operations itself, but for all business functions:
HR – retraining, employees with different skills needed, release non-suitable workers
Finance – change is costly and need to be financed , may interrupt the production and therefore cashflow and working capital cycle
Marketing – product may change by the method, affecting the image of the brand , change of cost may affect the product price
What are the main aspects to be considered before deciding about the
Method of production
- the target market – for example, the business may be producing a high volumes of a low-cost product for a very large market with little disposable income
- the state of existing technology – this can limit how flexible production can be
- the availability of resources – fixed capital, working capital, and human capital
- government regulations– for example, a business may have to meet certain targets for recycling or waste emissions.
Lean production is mainly about avoiding waste.
Which forms of waste can occur, that can be avoided?
● time (waiting for the next stage of production, or waiting for some elements to arrive)
● transportation (the movement within the factory or outside from subcontractors)
● products (defects that need to be scrapped)
● space (too much stock needs space)
● energy (under-utilization of some machines, or old energy-inefficient machines)
● talents (not using workers’ skills and knowledge).
Which are the three
types of resources in which waste can be avoided?
- Physical (material, fuel, space, machines, etc.)
- Human (unproductiveness, idle time)
- Financial (holding stock, tying capital not used elsewhere)
What are (four) methods of
Lean Production?
Explain.
- Kaizen – continuous improvement (corporate culture to always improve processes in learning cycles.)
- Just – in – time (avoiding stock to get supplies only when necessary
- Kanban (cards describing step by step the production process to individuals)
- Andon (automated signals, improving effectiveness)
What is
Cradle to cradle design and manufacturing
Products are designed to be fully recyclable.
Avoids physical waste, often in line with energy savings and CSR –criteria.
Link to sustainability policy : economical, social, environmentally friendly
What is the difference between
Quality Control
and
Quality Assurance?
Quality control is exerted by a a person looking over the production process. Associated with mass production, the job is stopped if there is a quality issue.
Quality assurance is overall control over the process starting with suppliers and incl. after sales services. Associated with cellular production.
The term
quality
suggests that a
product has which (5) features?
- reliable
- Safe
- Durable
- Innovative
- Value for money
What is the main feature of
Total quality management
And what are the main advantages and disadvantages
TQM is an approach to quality enhancement that permeates the whole organization. (not only production)
Advantages:
- Enhances reputation
- Safe cost on the long – run
- Improves the product quality
Disadvantages:
- Cost in the short term
- Difficult to maintain over long
What are factors to be considered when choosing
Location for business
- Cost
- Competition
- Types of Land
- Markets
- Labor Pool
- Infrastructure
- Suppliers
- Government (Laws and Taxes)
What types of
existing infrastructure
should be considered when choosing a
location for business?
- Transport networks for people and products
- Electronic networks
- Others which may be important e.g. for employees:
- Education , healthcare, security,
What is
Cannibalistic marketing?
Branches located so close that the new branch takes away customer from the other and eats up their profit.
To save transport cost should a business
- go closer to the market
- or to the (raw) material they are using?
If bulk decreasing (small end products form large quantities of raw materials) closer to the source. (e.g. paper mill)
If they are bulk increasing (e.g turn many small components to a bigger one , closer to the market .
What are examples for a
regional trading bloc?
EU or NAFTA
Several states between which there are no trade barriers (e.g. import fees) and which have together the same rules with other countries or blocs.
What are the
Pull factors of globalization
?
External factors that pull a company abroad:
- Improved communications
- Dismantling of trade barriers
- Deregulation of the financial markets
- Increasing size of multinational companies
What are the
Push factors of globalization
?
Internal factors that push the company out of their home country:
- Cost reduction
- Increase market share
- Use extension strategies
- Use defensive strategies
Define
Outsourcing and Offshoring
the practice of employing another business (as a third party) to perform some peripheral activities
but not the core activity of the company
e.g. transport, catering, training, cleaning
What is the main reasons for
Offshoring
and what are the major risks?
Reason
Reduce costs – other companies, specialized in the peripheral activity, can provide them cheaper due to economy of scale effects
This can improve capital utilization and delivery time and enables Focus on core products
Risks:
- Dependency on supplier
- Less control over the product (if production is outsourced partially)
